Interest rates on short-term Treasury bills rose in Monday's auction to the highest levels since September.
The Treasury Department auctioned $28 billion in three-month bills at a discount rate of 0.110 percent, up from 0.070 percent last week. An additional $29 billion in six-month bills was auctioned at a discount rate of 0.200 percent, up from 0.170 percent last week.
The three-month rate was the highest since three-month bills averaged 0.115 percent on Sept. 28. The six-month rate was the highest since 0.210 percent auction on Sept. 14.
Even with the small increases Monday, three- and six-month bills remain near historic lows. They have been there for much of the past year, reflecting the Federal Reserve's efforts to keep interest rates low to strengthen the struggling economy.
The Fed at its December meeting left its key bank lending rate at a record low near zero, where it has been for a year. It pledged to hold it there for an "extended period" to nurture the economic recovery.
Most economists say the Fed won't begin raising rates until the middle of 2010 at the earliest. Because inflation has been well behaved, the Fed has leeway to hold rates at record lows.
The discount rates reflect that the Treasury bills sell for less than face value. For a $10,000 bill, the three-month price was $9,997.22 while a six-month bill sold for $9,989.89. That would equal an annualized rate of 0.112 percent for the three-month bills and 0.203 percent for the six-month bills.
© Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.